Iran’s Bank Mellat finds no business in Seoul

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Iran’s Bank Mellat finds no business in Seoul

Large financial transactions have yet to be made at the Seoul branch of Bank Mellat since the government lifted its ban on the state-run Iranian bank’s operations a month ago, officials told the JoongAng Ilbo yesterday.

Bank Mellat’s Seoul branch was suspended from Oct. 11 to Dec. 10 as part of the government’s efforts to join international moves to sanction Iran for its nuclear development. But since the ban was lifted on Dec. 10, the branch hasn’t notified the Bank of Korea of a single new large transaction, a BOK official said.

“Bank Mellat is still facing financial regulations under United Nations Security Council sanctions on Iran, which were made in September last year because of the country’s nuclear development program,” said another government official. “The suspension has been lifted, but any new bank transaction involving $40,000 or more still requires approval from the government. There has been no request for such a transaction as of Jan. 11.”

The United States and European Union initially demanded Korea close down the Seoul branch of Bank Mellat or freeze its financial transactions indefinitely, due to concerns that the branch could be funneling money to Iran’s nuclear development program.

But because it lacked the legal power to do so, the Korean government joined in on the sanctions on a less-stringent scale by suspending the bank’s operations for two months and imposing new approval procedures for transactions of $40,000 or more.

“What local company would want to do business with a bank that was forced to close for two months and needs approval for transactions?” said a Korean diplomatic source.

The source speculated that the Iranian bank is keeping the Seoul branch open not for business purposes, but rather for political reasons because closing the branch could be seen as Korea succumbing to international pressure on the sanctions.

The Seoul branch of Bank Mellat is still involved in remitting money in transactions that were made before the sanctions were imposed in September. But these deals are being monitored by Seoul, a person familiar with the matter said.

U.S. Secretary of State Hillary Clinton this week urged continuing the sanctions against Iran.

By Kang Chan-ho, Moon Gwang-lip []
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